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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) JULY 20, 1999
OCCIDENTAL PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-9210 95-4035997
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
10889 WILSHIRE BOULEVARD, LOS ANGELES, CALIFORNIA 90024
(Address of principal executive offices) (ZIP code)
Registrant's telephone number, including area code:
(310) 208-8800
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Item 5. Other Events
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Occidental Petroleum Corporation reported on July 20, 1999 net income of $9
million ($.02 per share) for the second quarter of 1999, compared with net
income of $186 million ($.51 per share) for the second quarter of 1998. The
second quarter of 1999 included an after-tax charge of $3 million ($.01 per
share) for the partial redemption of the 11-1/8 percent senior debentures.
Earnings before special items were $4 million for the second quarter of
1999, compared with earnings before special items of $47 million for the second
quarter of 1998. Sales were $1.6 billion for the second quarter of 1999,
compared with $1.5 billion for the same period in 1998.
Oil and gas divisional earnings before special items were $165 million for
the second quarter of 1999, compared with $90 million for the second quarter of
1998. The increase in earnings before special items reflects the impact of
higher worldwide crude oil prices, increased international production and lower
costs, partially offset by higher exploration expense and lower domestic natural
gas prices.
Oil and gas results after special items for the second quarter of 1999 and
1998 were $165 million and $380 million, respectively. The 1998 results included
pretax gains of $290 million related to the sale of nonstrategic U.S. oil and
gas assets.
Chemical divisional earnings before special items were $17 million for the
second quarter of 1999, compared with $90 million for the second quarter of
1998. The decline in 1999 earnings before special items resulted primarily from
lower prices in basic commodity chemicals, partially offset by additional
earnings in the vinyls business.
Chemical results after special items for the second quarter of 1999 and
1998 were $29 million and $60 million, respectively. The 1999 results included
as a special item a $12 million gain related to the sale of a plant by an equity
affiliate. The 1998 results included $30 million pretax reorganization and other
charges.
Unallocated corporate other expenses were $32 million for the second
quarter of 1999, compared with $20 million for the same period in 1998. Included
in 1999 was $11 million expense for distributions paid on the Trust Preferred
securities issued by a subsidiary trust of Occidental in the first quarter of
1999.
For the first six months of 1999, Occidental's net loss was $61 million
($.20 per share), compared with net income of $363 million ($1.01 per share) for
the first six months of 1998. The six months results before special items were a
loss of $64 million for 1999, compared with earnings before special items of
$136 million for 1998. Sales were $3.0 billion for the six months of 1999,
compared with $3.2 billion for the same period of 1998.
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SUMMARY OF DIVISIONAL NET SALES AND EARNINGS
(Millions, except per-share amounts)
Second Quarter Six Months
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Periods Ended June 30 1999 1998 1999 1998
==================================== ========= ========= ========= =========
DIVISIONAL NET SALES
Oil and Gas $ 944 $ 739 $ 1,690 $ 1,479
Chemical 703 804 1,301 1,764
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$ 1,647 $ 1,543 $ 2,991 $ 3,243
==================================== ========= ========= ========= =========
DIVISIONAL EARNINGS (LOSS)
Oil and Gas $ 165 $ 380 $ 228 $ 612
Chemical 29 60 38 218
--------- --------- --------- ---------
194 440 266 830
UNALLOCATED CORPORATE ITEMS
Interest expense, net (123) (118) (239) (230)
Income taxes (a) (27) (116) (24) (242)
Other (32) (20) (48) (33)
--------- --------- --------- ---------
INCOME (LOSS) FROM
CONTINUING OPERATIONS 12 186 (45) 325
Discontinued operations, net -- -- -- 38
Extraordinary loss, net (b) (3) -- (3) --
Cumulative effect of changes in
accounting principles, net (c) -- -- (13) --
--------- --------- --------- ---------
NET INCOME (LOSS) 9 186 (61) 363
Preferred dividends (3) (5) (7) (9)
--------- --------- --------- ---------
EARNINGS (LOSS) APPLICABLE
TO COMMON STOCK $ 6 $ 181 $ (68) $ 354
========= ========= ========= =========
EARNINGS PER COMMON SHARE:
BASIC
Income (loss) from continuing
operations $ .03 $ .51 $ (.15) $ .90
Discontinued operations, net -- -- -- .11
Extraordinary loss, net (b) (.01) -- (.01) --
Cumulative effect of changes in
accounting principles, net (c) -- -- (.04) --
--------- --------- --------- ---------
BASIC EARNINGS (LOSS) PER
COMMON SHARE $ .02 $ .51 $ (.20) $ 1.01
========= ========= ========= =========
DILUTED
Income (loss) from continuing
operations $ .03 $ .49 $ (.15) $ .88
Discontinued operations, net -- -- -- .10
Extraordinary loss, net (b) (.01) -- (.01) --
Cumulative effect of changes in
accounting principles, net (c) -- -- (.04) --
--------- --------- --------- ---------
DILUTED EARNINGS (LOSS) PER
COMMON SHARE $ .02 $ .49 $ (.20) $ .98
========= ========= ========= =========
AVERAGE COMMON SHARES OUTSTANDING 348.4 359.1 348.1 351.8
==================================== ========= ========= ========= =========
See footnotes on following page.
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SUMMARY OF OPERATING STATISTICS
Second Quarter Six Months
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Periods Ended June 30 1999 1998 1999 1998
==================================== ========= ========= ========= =========
NET OIL, GAS AND LIQUIDS
PRODUCTION PER DAY
United States
Crude oil and condensate
(thousands of barrels) 62 75 64 78
Natural gas liquids
(thousands of barrels) 9 9 9 7
Natural gas
(millions of cubic feet) 670 578 659 603
Other Western Hemisphere
Crude oil and condensate
(thousands of barrels) 110 79 106 86
Eastern Hemisphere
Crude oil and condensate
(thousands of barrels) 151 143 148 137
Natural gas
(millions of cubic feet) 54 124 53 131
CAPITAL EXPENDITURES (millions) $ 131 $ 306 $ 263 $ 586
========= ========= ========= =========
DEPRECIATION, DEPLETION AND
AMORTIZATION OF ASSETS (millions) $ 203 $ 221 $ 400 $ 451
==================================== ========= ========= ========= =========
(a) Includes an offset for credits in lieu of U.S. federal income taxes
allocated to the divisions. Divisional earnings have benefited from credits
allocated by $31 million and $4 million at Oil and Gas and Chemical,
respectively, in the second quarter of 1999 and by $3 million and $6
million at Oil and Gas and Chemical, respectively, in the second quarter of
1998. The Oil and Gas second quarter of 1999 amount included the results of
the pending Bangladesh asset swap which, after tax credits, will not have a
significant impact on divisional earnings.
(b) The second quarter and six months of 1999 reflects the partial early
extinguishment of 11-1/8 percent senior debentures at a redemption price of
105.563 percent of the principal amount. The impact of the early
extinguishment is a $3 million charge which is net of a $1 million income
tax benefit.
(c) The six months of 1999 reflects the adoption of SOP 98-5 "Reporting on the
Costs of Start-Up Activities", which requires expensing of start-up costs
as incurred and those costs that are currently capitalized at date of
adoption. The impact of SOP 98-5 is a $15 million charge which is net of an
$8 million income tax benefit. Also reflects the adoption of EITF 98-10
"Accounting for Contracts Involved in Energy Trading and Risk Management
Activities", which requires energy trading contracts to be marked to
market. The impact of EITF 98-10 is a $2 million credit which is net of a
$1 million income tax charge.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
OCCIDENTAL PETROLEUM CORPORATION
(Registrant)
DATE: July 21, 1999 S. P. Dominick, Jr.
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S. P. Dominick, Jr., Vice President and Controller
(Chief Accounting and Duly Authorized Officer)
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